The Share of Good Jobs has Fallen Since 1979

Washington, D.C.- The U.S. economy has lost about one-third of its capacity to generate good jobs, according to a new report from the Center for Economic and Policy Research (CEPR). Despite substantial increases in the education, age, and quantity and quality of technology over the last three decades, the share of workers with a “good job” has fallen since 1979, the CEPR researchers concluded.

The report, “Where Have all the Good Jobs Gone?," defines a good job as one that pays at least $18.50 an hour, has employer provided health insurance, and some kind of retirement plan. The $18.50 per hour figure (which translates to about $37,000 per year on a full-time basis) is equal to the inflation-adjusted earnings of the typical male worker in 1979, the first year of data analyzed in the report.

By this definition, less than one-fourth (24.6 percent) of the workforce in 2010 (the most recent year for which data are available) had a “good job.” This figure was down from 27.4 percent in 1979.Compared to the end of the 1970s, the typical worker is almost twice as likely to have a four-year college degree, is about seven years older, works with about 50 percent more physical capital, and uses much more advanced technology. Even after the Great Recession, the report notes, the United States is over 60 percent richer on a per-person basis than it was in 1979.

“The standard explanation for this loss of the economy’s ability to create good jobs is that most workers skills have not kept up with the pace of technological change,” said John Schmitt, a senior economist at CEPR and one of the report's co-authors. “But, it is hard to reconcile that view with the fact that even workers with a college degree are less likely to have a good job now than at the end of the 1970s.”

The authors suggest, instead, that the decline in the economy’s ability to produce good jobs relates to a deterioration of the bargaining power of workers. They point to the fall in the inflation-adjusted value of the minimum wage, the decline in union representation, trade deals, high unemployment, and other factors that reduce the bargaining power of workers relative to their employers.